Bailout in doubt?

Greece is to hold a referendum on the latest European Union aid package agreed last week, which was intended to resolve the country's debt crisis. The package seeks a 50 percent write-down of government debt, and provides the country with an additional 100 billion euros ($140 billion) in rescue loans.

Prime Minister George Papandreou said his government trusted the judgment of Greek voters. However, he did not set a date for the vote.

Such a referendum would be the first to be held in Greece since 1974, when the monarchy was abolished by a landslide vote, months after the collapse of the military dictatorship.

"This will be the referendum: The citizen will be called upon to say a big 'yes' or a big 'no' to the new loan arrangement," Papandreou told Socialist members of parliament.

"This is a supreme act of democracy and of patriotism for the people to make their own decision ... We have a duty to promote the role and the responsibility of the citizen," he added.

"If the Greek people do not want it, it will not be adopted," he said.

Skeptical voters

Papandreou's government has seen its majority reduced to just three seats in parliament and its approval ratings plummet amid harsh austerity measures that are likely to send the country into a fourth year of recession in 2012. Last week, protests were held around the country against the tough austerity policies.

According to a survey on Saturday, nearly 60 percent of Greeks view Thursday's agreement on the new bailout package as negative or probably negative.

The deal was reached at a marathon EU summit in Brussels, after months of haggling.

Other EU governments appear not to have been informed about Papanderou's referendum plans. The German finance ministry issued a statement saying it had no official information and was unable to comment.

Author: Joanna Impey (AFP, AP, dpa, Reuters)
Editor: Michael Lawton